Trei Real Estate GmbH (Trei), an internationally active property developer and property asset holder of residential and retail real estate, took out an unsecured loan in a volume of €70 million from a major German real estate lender. It involves an innovative financing structure that includes corporate finance elements, on the one hand, while also having the characteristics of a real estate loan, on the other hand. Trei intends to use the borrowed capital to finance its growth trajectory.
Matthias Schultz, the CFO of Trei Real Estate, elaborated on the background to the loan: “The loan is a direct financing arrangement that Trei Real Estate GmbH carries in its books. At the same time, the loan is also based on the current cashflow of altogether 60 fully occupied supermarkets in the Czech Republic. The financing deal was worked out jointly with the lending bank.”
In the long run, Trei plans to increase its debt-to-equity ratio noticeably. Trei Chief of Finance Schultz explained: “The gearing ratio of Trei Real Estate is barely 30 percent at the moment. Our medium-term target is a 50-percent ratio relative to our overall portfolio. In a parallel effort, we will keep building up the portfolio from currently €1.1 billion to €1.8 billion. Expressed in absolute figures, this means that we intend to borrow a further approximately €500 million.”
Pepijn Morshuis, CEO of Trei Real Estate, commented the further strategy of Trei: “The purpose of this financing arrangement is to free up capital that we may then use to fund our development activities in Germany, Poland, the Czech Republic and the United States. In addition to our existing portfolio, we currently have around €850 million worth of property developments in the pipeline.”